A landlord has to keep track of a lot of documents, some pertaining to tenants and others dealing with a building. The problem is figuring how to keep track of everything, which is what the following guide will help with.
Why Document Management Matters
The first thing that should be pointed out is how important document management is. Making sure documents are properly filed and maintained helps protect you from all sorts of issues like an audit or legal dispute.
If you manage your documents correctly, you should be able to find lease terms with a few clicks or deal with a Fair Housing claim with no issues. Remember that you are required by the government to keep some of these documents.
Using the Right Tools
For a long time, a landlord had to file everything in big file cabinets. These were quite large, very heavy, and could make moving a pain should you need to your office around. On top of all that, you had to clean them, repair them, or even replace them sometimes. Thankfully, those days are long gone.
You can now choose tech-friendly methods of storing data. You’ll need landlord software that helps store the data for you. Make sure you pay attention to any additional perks you might enjoy with the software you choose. Some systems offer things like pre-made leases you can send new tenants, or you can fill out a listing that’s posted on several rental sites.
Understand What You’re Filing
The next thing you need to do is be sure you understand what you are filing. There’s a lot you need to keep in mind, and the following will help you see why a good document management system is what you need.
One thing you’ll have to worry about are the documents for your tenants. You’ll need to keep a tenant’s application along with the screening reports that were made during the tenant’s application process.
All correspondence you have with a tenant must be filed, and this includes things like denials. The signed lease has to be kept safe along with any changes made to that lease. You’ll also want to keep any information on a tenant’s security deposit, including any refunds given. These are just some documents you’ll need to keep.
It’s important to pay attention to property files. All of this information should be filed away in its category. You’ll have to keep paperwork regarding the property before the tenant moves in and when the tenant moves out.
You also want to file away any documents detailing work done on your property, such as repairs or updates. Of course, you want to keep property deeds in a safe place as well. All tax records regarding your property should also be kept in a safe place. Make sure that any data about inspections performed on your property is also stored away.
You also have to worry about vendor documents. Doing this should help make things easy if you ever have to deal with a vendor dispute or when you complete 1099-MISC forms for the tax season.
You want to keep things like vendor screening files, vendor contracts, work orders, and any correspondence. You also want to keep invoices and receipts linked to your vendors. Make sure you separate all of your documents according to each vendor you work with.
Financial records are quite important as well and deserve their own category. Doing this will make tax season a breeze or if you ever have to deal with an audit. For this category, you’ll need to keep bank statements, deposit slips, a general ledger document, and copies of any checks associated with your property.
You’ll also want to make sure you have tenant ledgers and a personal funds ledger. Be sure to keep purchase orders here and anything else you can think of regarding your finances.
You must separate business documents as well. These documents usually deal with your business structure or being legally compliant.
Here is where you should find things like business licenses and permits. You’ll find insurance documents about your property as well as audit records if you’ve been audited before. You also want to keep employee records along with any other legal records you’ve been given.
Hopefully, this guide helps you keep track of all important documents. Remember, whatever you use to store these documents needs to be protected against cyber attacks to protect yourself and your tenants.